Writers both friendly and hostile to the banking establishment have focused on the continuity at some high levels of policymaking. Ben Bernanke has stayed on as top central banker; Timothy Geithner slid from the New York Fed to the Treasury after Obama’s inauguration; TARP was a bipartisan collaboration between Nancy Pelosi and George W. Bush, continued by his successor. Various former investment bankers have shuffled in and out of office in Washington. Lost or marginalized in these tales is the extraordinary partisan political mobilization of the past several years.

Yet these have been wild times in American politics.Consider the unprecedented enthusiasm unleashed among younger voters by the Obama campaign, or unexpected Democratic wins in North Carolina and Virginia. These events of 2008 were followed by a campaign of extraordinary legislative obstruction by congressional Republicans,the passage of the most significant expansion of the welfare state in 45 years, the intense mobilization of the Tea Party, the overwhelming Republican sweep of the 2010 midterms, and a subsequent campaign to scale back the size and scope of government that’s already slashed a record quantity of public sector jobs.

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Everyone knows this, of course, but those shelves full of financial-crisis books give it short shrift. Yet America’s inability to bounce back from adverse economic shocks is clearly linked to the paralysis and polarization of the political system. Efforts to understand the one without the other are doomed.

As an analysis of the politics of the present day, The Age of Austerity is an impressive synthesis of reporting and political science. Eschewing the kind of personality-driven trivia that constitutes so much campaign reporting, Edsall digs deep into the underlying social, economic, and even psychological drivers of America's increasingly polarized political coalitions.

Edsall describes a conservative movement of the socially dominant—relatively wealthy, white, and elderly—facing off against what demographics suggest will be an ever-expanding alliance of blacks, Hispanics, the young, the poor, and social-service providers. This right coalition stood, superficially at least, on the verge of being routed in January 2009. Instead, a mix of canny legislative strategies, Democratic errors, and sharp recession has put them back in the game. Now, Edsall writes, “Republicans see the window closing on the opportunity to dismantle the liberal state.” They are determined to give it what they see as one last shot before they’re “forced to accommodate changing demographics as proponents of big government gain traction.”

Economic hardship is not just bad for incumbent politicians' priorities, Edsall argues. "The politics of austerity” mean that “reasoned debates over not only immigration but a host of other issues—from the deficit to entitlement spending to U.S. foreign policy—are trumped by fear.”

Unfortunately, at times Edsall himself seems to have fallen into the fear-dominated mind-set he warns against. We don’t genuinely face a politics of scarcity but rather the politics of high unemployment and slow growth. Even at the recession’s low point in 2009, America was producing more income per person than it had been in the halcyon days of the late ’90s. By the same token, the United States continues to be a substantially richer country, in per capita terms, than places like Germany and Sweden that have weathered the recession much better.

That’s a quibble, but it infects Edsall’s view of the long-term fiscal gap that would exist even if there had been no recession, no bailouts, no stimulus, no Bush tax cuts, and no Iraq war. This is driven, everyone knows, primarily by Medicare. Edsall emphasizes the role of an aging population, but the more fundamental issue is that we’ve been fortunate to benefit from untold numbers of useful medical innovations that have changed what it means to be committed to providing health care to the elderly.

That is to say, it’s more a crisis of abundance than of scarcity. If we stop inventing new treatments, then costs will tumble as patents (and patients) expire. Indeed, the 2003 bill adding a prescription drug benefit to Medicare has turned out to be cheaper than expected, largely because the pace at which new medicines are invented has slowed. Common sense says that was a bad thing, and that a zero-innovation future would be bleak, but the grim fiscal projections you’ve seen are premised on it not happening.

A calm, rational, consensus-oriented society should be able to divide up a growing pie in a way that leaves everyone better off. American politics, alas, are not consensus-oriented—in part for the deep demographic and psychological reasons Edsall explores. America doesn’t only need to reconcile conflicting concrete interests; the nation faces a clash between highly moralized worldviews. And with every passing year of short-term economic pain, we grow less calm and rational as the bleak short-term outlook induces panic and confusion about the long-term.

But the short-term outlook is, in turn, so bleak precisely because of the political system’s inability to act with common purpose. The time-tested cures for recession—tax cuts, deficit spending, currency devaluation—still work and have been deployed effectively by governments of the left and right in places ranging from Australia to Sweden to Israel. Any of these options in any combination would lead to a superior overall result than paralysis and stagnation, but all of them involve some costs to some players—higher future taxes, losses on creditors, or political vulnerabilities for public spending programs. A political system increasingly dominated by a frantic zero-sum mentality can’t deliver the short-term solutions that would create the breathing room for solving long-term problems.

The good news is that for all that politics matters to the economy, they’re not decisive. With better solutions, the recession could have been shorter and the recovery faster. Edsall seems persuaded that the Age of Austerity will remake our politics in a fundamental and long-lasting way, and in the future “the current environment of hostile competition over scarce resources will be looked back upon as a benign, indeed halcyon, moment.” But the economic outlook is already looking brighter than it did at the book’s press time. With a little bit of luck—and a little less partisan bickering—we’ll look back on the period Edsall chronicles as a fleeting and unpleasant one rather than the dawning of a new era.